{"id":5142,"date":"2016-04-04T10:47:57","date_gmt":"2016-04-04T15:47:57","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/smallbusiness\/starting-a-business\/buying-an-existing-business.html"},"modified":"2026-05-11T12:46:00","modified_gmt":"2026-05-11T17:46:00","slug":"buying-an-existing-business","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/smallbusiness\/starting-a-business\/buying-an-existing-business.html","title":{"rendered":"Buying an Existing Business"},"content":{"rendered":"\n
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Buying an Existing Business<\/h1>\n\n
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\n By Amber Sheppard, Esq.<\/a> | Legally reviewed by Catherine Hodder, Esq.<\/a>\n | Last reviewed\n
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Editorial Note: We earn a commission from affiliate partner links on FindLaw. Commissions do not affect the editorial integrity of our legal content.<\/p>\n\n <\/div>\n \n

\n \n <\/i>\n Legally Reviewed\n <\/summary>\n\n
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This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

\n \n <\/i>\n Fact-Checked\n <\/summary>\n\n
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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n\n\n

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An entrepreneur buying an existing business must go through the due diligence of reviewing financial statements, business operations, tax returns, and legal contracts to understand the company\u2019s true valuation, growth potential, and any legal or financial risks.<\/p>\n\n <\/div>\n\n\n\n

Buying an existing business<\/span> is a unique experience with many rules and procedures. While all big purchases usually require research, information about\u00a0cars and houses\u00a0is often readily available. On the other hand, data on\u00a0existing small businesses<\/span> for sale can be hard to find.<\/p>\n

Before writing a check or securing a business loan, it\u2019s important to research and understand exactly what you\u2019re getting into. This article covers all aspects of buying an existing business<\/span>, from understanding valuation<\/span> and accounting terminology to closing the deal.<\/p>\n

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Do Your Research<\/h2>\n

Entrepreneurs<\/span> must exercise\u00a0due diligence<\/span><\/a>\u00a0when buying and selling a small business<\/span>. This means reviewing the existing business<\/span> documents and current owner<\/span> information. There are legal documents<\/span> and financial documents that help you figure out the value of the business<\/span> you want to buy.<\/p>\n

Some states have laws that address business opportunities in order\u00a0to minimize fraud and increase transparency in such large transactions. Many of these laws ban the sale of a business unless the seller provides a potential buyer with a pre-sale document filed with a state agency giving certain disclosures. In general,\u00a0state business opportunity laws<\/a>\u00a0address every type of business<\/span> opportunity that could be offered. You must research the\u00a0business laws of your state<\/a>\u00a0before buying an existing business<\/span>.<\/p>\n

Financial Documents<\/h3>\n

There are many documents a potential new owner needs to review before making an offer to buy an existing business<\/span>. Financial documents help determine the viability of financing options<\/span> and the company\u2019s health.<\/p>\n

Some documents to review include:<\/p>\n